I formally borrowed 60,000 from my company to pay off a mortage and paid the company the same interest rate 3.125%. Can I claim this interest on my personal taxes?

Forum|Forum|7 years ago
June 5, 2019
1 reply
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I am a shareholder in the company and we had extra cash reserves, rather than pay the mortgage company we paid off the mortgage with a personal business loan, well documented and approved by members of the board (C Corp).

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No. A loan is only considered a tax deductible mortgage if the loan is secured by the property and "perfected" -- that is, it must be written in such a way that you could be foreclosed if you defaulted, and it must be recorded as a lien against the property with the local authorities, usually the county clerk. A loan that is not secured by the home and recorded as a lien is not deductible even if it is used to buy or build a house or pay off a previous mortgage.